Don’t Worry, Big Brother Will Pay For It!

I know a lot about being a big brother. I’ve got two younger brothers myself.

It’s a cool role for sure; except that at times you are treated like a human ATM. That’s right; when mom and dad can’t pay, you are there to “save the day.”

Doesn’t matter if it clothes, shoes, lunch, dinner or speeding tickets. When you are the younger sibling and you can’t swing it…you ask big brother.

Little Brother Facebook Couldn’t Afford Skype

Of all the companies that seemed to be suitors for Skype, Facebook did indeed make the most sense. Facebook is a communications platform, of which voice, video and sharing must be a part of (all things Skype does well).

Till the recent Skype integration with Facebook, Facebook did not have solid voice or video messaging capability. It needed it badly to further extend it’s platform’s utility for users.

Except Facebook couldn’t afford Skype. It’s true that on paper Facebook is worth more than Skype, but Skype was owned by private equity, venture firms and individuals who clearly wanted cash, not stock, for Skype (hence the IPO).

Microsoft: The New Facebook Utility Provider

Say what you want about what Microsoft currently lacks: vision, innovation, creativity; if there’s one thing they don’t that’s cash.For them $8.5 billion was nothing more than an investment in the future of their little brother and their relationship.

With a 1.6% stake in Facebook, Microsoft has a nice sized financial position in the company. They also power Facebook’s search functionality. And at one time they even powered Facebook’s advertising.

Throw in the recent voice and video calling powered by Skype and Microsoft is now the dominant utility provider on the Facebook platform; not such a bad place to be when you consider the growth and usage increases Facebook continues to see.

Plus this integration further exposes Skype to generations of users who quite possibly never heard or used the service before; all who can be monetized. Not mention other Windows products.

Only Time Will Tell

Only time will tell if this move proves successful for Microsoft, but if the goal was to have Microsoft become more ingrained with Facebook, well it looks like they’ve already succeeded.